Author Topic: Closing costs tax deduction on house bought in 2015?  (Read 2354 times)

FerrumB5

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Closing costs tax deduction on house bought in 2015?
« on: December 23, 2016, 01:11:43 PM »
Hi Folks,

I bought my first house in 9/2015 and I was told I could not apply any deductions related to closing costs (there were no points, only attorney fees, and regular stuff), but I could do it in 2016 tax year. However, I just looked quickly thru TaxAct options/questions on that matter and found only deductions for real estate tax and interest.
Any ideas? Thanks!

secondcor521

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #1 on: December 23, 2016, 02:31:17 PM »
I am assuming you bought this house as a personal residence and not as an investment property / rental.

Closing costs, in general, are not tax deductible except for two things:  property taxes and mortgage interest.  Points, if you paid them, are a form of mortgage interest and can generally be deducted in the year paid on a purchase - see IRS Tax Topic 504 for all of the details.  If you have an escrow account, your mortgage company should send you a 1098 each spring with the amounts for you to deduct for each of these two categories.

These two items are usually listed on your tax form Schedule A lines 6 and 10.

Whoever told you that you could deduct closing costs other than real estate taxes or mortgage interest misinformed you.

FerrumB5

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #2 on: December 23, 2016, 08:55:48 PM »
Thanks, secondor.

No points. Escrow thru some regional bank, all paid as expected. So, if there's nothing to deduct from closings, I guess it's all good and I'm not missing something.
Happy holidays!

Drifterrider

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #3 on: December 28, 2016, 10:37:44 AM »
Not knowing what you paid, it is difficult to determine what can be itemized.  Look to your HUD-1.

Points, originating fee, VA fee, PMI pre-paids, etc.

Also, you can run a simulation on Tax Act software (the free stuff) and see what fees/questions it addresses.


FerrumB5

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #4 on: December 28, 2016, 11:28:17 AM »
Not knowing what you paid, it is difficult to determine what can be itemized.  Look to your HUD-1.

Points, originating fee, VA fee, PMI pre-paids, etc.

Also, you can run a simulation on Tax Act software (the free stuff) and see what fees/questions it addresses.

Paid: Originating, title, transfer, title services and ins, govt recording charges, appraisal.
No points or PMI

Drifterrider

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #5 on: December 29, 2016, 08:25:25 AM »
If it is your residence you get to itemize the origination fee.  That may or may not help.

secondcor521

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #6 on: December 29, 2016, 01:14:24 PM »
If it is your residence you get to itemize the origination fee.  That may or may not help.

I disagree, but the question seems unsettled:

https://ttlc.intuit.com/questions/2359646-is-line-803-on-hud-1-adjusted-origination-charges-always-tax-deductible

Drifterrider

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Re: Closing costs tax deduction on house bought in 2015?
« Reply #7 on: December 30, 2016, 02:42:08 PM »
Originating fee on a residence is deductible if you pay it.  It should be shown on the 1099.  PMI, VA funding fee, interim interest, prepaid taxes all count (unless you are refinancing, then you have to take it over the term of the loan).

This applies to the US federal tax.